Billions are traded in foreign exchange on a daily basis. Whether you are an experienced trader or an absolute beginner, finding a profitable forex day trading strategy or system is complex. So learn the fundamentals before choosing the best path for you.
With this introduction, you will learn the general forex trading tips and strategies applicable to currency trading. It will also highlight potential pitfalls and useful indicators to ensure you know the facts. Lastly, use the broker list to compare the best forex brokers for day trading in Nepal 2018.
Why Trade Forex?
In the forex market there is an average volume of over $3.2 trillion dollars traded per day. So, there is an abundance of trades and moves you can make.
Firstly, you have the pairs stemming from the eight major global currencies. On top of that, many regional currency pairings are also available for trade. More options, more opportunities to turn a profit.
The forex market is readily accessible, open twenty-four hours a day, five days a week. As a result, you decide when to trade and how to trade.
A significant amount of forex currency pairings are traded on margin. This is because leverage can be used to help you both buy and sell large quantities of currency. The greater the quantity, the greater the potential profit margin.
Forex offer relatively low costs and fees compared to other markets. In fact, some firms don’t charge any commission at all, you pay just the bid/ask spreads.
How To Start Trading CFDs
There are thousands of individual markets to choose from, including currencies, commodities, plus interest rates and bonds. Try and opt for a market you have a good understanding of. This will help you react to market developments. Most online platforms and apps have a search function that makes this process quick and hassle-free.
If you buy you go long. If you sell you go short. Bring up the trading ticket on your platform and you will be able to see the current price. The first price will be the bid (sell price). The second price will be the offer (buy price).
The price of your CFD is based on the price of the underlying instrument. If you have a reason to believe the market will increase, you should buy. If you believe it will decline you should sell.
You now need to select the size of CFDs you want to trade. With a CFD, you control the size of your investment. So although the price of the underlying asset will vary, you decide how much to invest. Brokers will however, have minimum margin requirements – or more simply, a minimum amount that is required in order for the trade to be opened. This will vary asset by asset. It will always be made clear however, as will the total value (or your exposure) of the trade.
Volatile assets such as cryptocurrency normally have higher margin requirements. So a position with exposure to $2000 worth of Bitcoin, might need margin of $1000 for example. A well traded stock however, may only need 5% margin. So a $2000 position on Facebook, may only require $100 of account funds.
This will help you secure profits and limit any losses. Most CFD strategies for beginners and experienced traders will employ the use of stop losses and/or limit orders. They tie in with your risk management strategy. Once you have defined your risk tolerance you can place a stop loss to automatically close a trade once the market hits a pre-determined level. This will help you minimise losses and keep your accounts in the black – leaving you to fight another day on subsequent trades.
A limit order will instruct your platform to close a trade at a price that is better than the current market level. If you opt for a trading bot they will use pre-programmed instructions like these to enter and exit trades in line with your trading plan. These are perfect for closing trades near resistance levels, without having to constantly monitor all positions.
Once you’ve placed your trade and stop or loss limits, your profits will shift along with the market price. You can view the market price in real time and you can add or close new trades. This can be done on most online platforms or through apps.
If your stop loss or limit order hasn’t been activated you can close it yourself. Simply select ‘close position’ from the positions window. You will be able to see your profit or loss almost instantly in your account balance.
What Can Be Traded?
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The foreign exchange currency market is the world’s most popular and liquid.
The sheer volume of forex trading makes it attractive for day traders. There are multiple short-term opportunities in a trending currency pair, and an unrivalled level of liquidity to ensure opening and closing trades is quick and slick. More suited to technical analysis, there are other ways to trade foreign exchange. In addition, forex has no central market. This means traders can make trades six days a week, 24 hours a day. They present a great starting point for entry level or aspiring traders with full time jobs.
Physical stocks in individual companies, regular and Leveraged ETFs (an “Exchange Traded Fund” holds multiple stocks or commodities and is traded like a single stock), futures, and stock options.
Trading stocks intraday offers different opportunities than a traditional ‘buy and hold’ strategy. Speculating on stock prices via CFDs or spread betting for example, mean traders can profit from falling prices too. Margin or leverage also reduce the capital required to open a position. So you can take a position on the latest news release, product announcement or financial report – as well as technical indicators.
The two most popular currently are Bitcoin and Ethereum.
The financial vehicle of the moment. Spectacular growth has seen cryptos attract many new investors. Brokers are also ensuring retail access to these markets is less complicated. Taking a view on any of these new blockchain based currencies is being simplified all the time. Barriers to entry are now almost nil, so whether you are a bull or a bear, now is the time.
The simplest and most predictable method, as the timing and return on a successful trade are known in advance.
Regulatory changes are pending, and with the sector maturing, these products are now offered by big established brands. The only question for you is – will the asset rise in value, or not? With the downside limited to the size of the trade, and the potential payout known in advanced, understanding binaries is not difficult. They offer a different method of trading, and can play a part in any day trader’s daily portfolio.
What is a Demo Account?
A demo account is a kind of trading simulator, or practice account, that allows you to practice day trading with a wide range of financial instruments, from stocks, futures, and options to CFDs and cryptocurrency. Demo accounts are funded with simulated money, allowing you to gain trading experience without risking real capital. This allows you to craft strategies and build confidence while getting familiar with market conditions. In addition, it’s an effective way to test drive a potential broker and software.SignUp Demo Account
The Financial Products offered by the company include Contracts for Difference (‘CFDs’) and other complex financial products. Trading CFDs carries a high level of risk since leverage can work both to your advantage and disadvantage. As a result, CFDs may not be suitable for all investors because it is possible to lose all of your invested capital. You should never invest money that you cannot afford to lose. Before trading in the complex financial products offered please ensure to understand the risks involved.
DepTrading was founded in 2017. We provide our traders with a full range of trading charts and real-time market data on major asset classes, categories, and global events. We track geopolitical events as they unfold, providing you with in-depth analyses of how these forces affect the global financial markets